Outsourcing the distribution of a business’s marketing materials is a no-brainer for many companies because this activity is normally very different from the core business activities. You need warehousing expertise together with an IT system that’s built for this specific activity. But what are the key points to consider in specifying and managing an outsourced contract for marketing material distribution?
Before appointing an outsource partner ask to see a typical Service Level Agreement (SLA). This details the main contractual terms and performance criteria and the SLA should highlight the critical areas that you need to discuss with the partner.
The SLA should cover at least the following areas:
- Access to your stock. How do you ensure that the right people from your sales team get access to the right stock items? For example sales staff may need access to point of sale and product brochures, while marketing staff may need access to exhibition and corporate material.
- The functionality of the order processing system. What will the ‘front end’ of the system look like and how easy will it be to order items? Ecommerce software can be used effectively for this task, there are various open source solutions and so this does not need to be an expensive cost.
- Maintaining stock levels. You need to have access to real-time information on your exact stock status, what is physically held, what is on ‘purchase order’ (waiting to arrive) and what is on ‘sales order’ (waiting to be despatched). Your outsourcing partner should have fully integrated stock and order management systems and the ability to provide real-time reports.
- Despatch/Delivery times. What is the target for order turnaround? Is there a choice for standard and urgent delivery? How are you notified of a despatch? (email is normally sufficient). Is it possible to include special instructions for the delivery of a particular order? Make sure that the outsource partner provides a tracking link in the despatch notification emails.
- Value and quantity of merchandise being ordered. Do you need to place restrictions on the users (eg your sales team) about how much stock they can order? For example, a user can be given a budget or an allocation of stock items.
- Added value services. For example, do you require product photography? If the outsource partner can provide this then you will avoid major logistical headaches and additional expense.
- Integration of IT systems. Do you require integration with your Enterprise Resource Planning (ERP) system? In terms of IT, how competent is the outsource partner? Do they follow good IT security and management practices?
The SLA is the principle contractual document but perhaps the most important criterion for a successful outsource relationship is the partner’s attitude to customer service. There will inevitably be times when you require a large order in a short time so it’s best to have a partner with a flexible, can-do approach to customer service and a non-punitive approach to billing.
For more information see Outsourcing Marketing Material Distribution – How do Clients Stay in Control?